Proponents of light rail transit (LRT) assert that operating cost
savings are a major advantage for LRT and a major reason why this mode is such an attractive choice compared to various bus
service alternatives. it's argued that LRT tends to be much cheaper to operate than comparable bus service, particularly for
heavier passenger volumes, but even for moderate traffic as well.

Moving More Riders More Efficiently

Why? The short answer is: LRT attracts more passengers, for a
given level of service, and then provides increased capacity more
cost-effectively to transport those passengers expeditiously,
safely, and comfortably.

One reason light rail
costs tend to be lower is that LRT vehicles provide more passenger space and, in addition, can be coupled in trains,
typically from 2 to 4 cars in length. This means that a single train operator is needed instead of many bus drivers – a significant cost advantage, since
operator/driver wages make up about 70%-75% of ongoing operating costs. (Those trains are also quite flexible and easier to
handle than buses – disrupting cross-traffic less, able to easily bend around corners and perform other maneuvers which would
be a headache even for articulated buses with trailers.)

Especially with entrained vehicles, passengers in rush hour (or
other peak periods, like sports events or Christmas shopping) can
be accommodated and moved much more rapidly and efficiently.
Even when the trains operate on public arterials, there's
significantly less conflict with other traffic than there would be if
expensive fleets (or "platoons") of buses were used instead.

Wishful Thinking or Reality?

But are these arguments just theoretical, or is there concrete
evidence to substantiate these claims for LRT? Readily available
data from US operations – especially for relatively new systems 
suggest that LRT does indeed tend to be much cheaper to
operate than comparable bus service – most often per
passenger-mile (light rail trips tend to be longer), and often per
passenger as well.

Comparative figures from the Federal Transit Administration's
1998 database, for the percentage cost saved by LRT (over bus
service), both per boarding rider and per passenger-mile (p-m),
demonstrate this.

The FTA's 1998 National Transit Database (NTDB) provides data
for operations and maintenance (O&M) cost, unlinked trips
(boardings, or "riders", on each route link – not "linked" for a
passenger's initial origin to final destination), and passenger-miles
travelled (how many miles all those riders actually rode). in Table
1 below, we've selected out the statistics for all of the USA's
relatively new LRT installations, using modern vehicles and
engineering techniques in major corridor service.

Table 1. New LRT Operating Data

O&M Cost

Unlinked Trips

Passenger Miles

Bus

LRT

Bus

LRT

Bus

LRT

($ Mn)

($ Mn)

(Mn)

(Mn)

(Mn)

(Mn)

San Diego

$58.2

$26.5

40.4

23

153.5

152.7

St. Louis

$98.8

$19.2

39.6

14.6

150.4

95.9

Los Angeles

$633.4

$51.4

367.9

23.9

1,332.2

170.5

Portland

$120.9

$22.3

67

11.8

237.0

63.3

Sacramento

$41.8

$14.8

19.7

8.1

79.5

39.4

Dallas

$161.0

$27.7

49.2

10.9

218.8

58.9

Baltimore

$150.2

$23.0

81.3

7

285.9

48.0

Denver

$142.1

$8.0

59.8

4.8

269.8

13.1

San Jose

$145.9

$26.2

46.5

6.9

202.4

33.0

Buffalo

$50.2

$14.0

19.8

7.2

64.1

16.3

Based on the data from Table 1, we've calculated the O&M
(operating) cost per rider-trip (i.e., boarding rider) in Table 2, below. This table also shows the difference of LRT compared
with bus – a negative value indicates that LRT cost is lower, while a positive value indicates it's higher.

Table 2. Operating Cost per Rider-Trip

Bus

LRT

% Difference

($)

($)

(%)

San Diego

$1.44

$1.15

-20%

St Louis

$2.49

$1.32

-47%

Los Angeles

$1.72

$2.15

25%

Portland

$1.80

$1.89

5%

Sacramento

$2.12

$1.83

-14%

Dallas

$3.27

$2.54

-22%

Baltimore

$1.85

$3.29

78%

Denver

$2.38

$1.67

-30%

San Jose

$3.14

$3.80

21%

Buffalo

$2.54

$1.94

-24%

It can be seen that, in most cases, LRT's cost per boarding rider
is significantly lower than for bus. However, the cost per rider is hardly the
whole story – because LRT typically carries riders farther than buses. in other words, the average trip length tends to be longer
on LRT (one reason is that it provides a more comfortable ride which attracts more travellers from cars).

Why should you expect a trip of, say, 2 miles to cost the same as
a trip for 20? in most cases, LRT is carrying its riders further, and so the cost per rider-trip in some cases is, indeed, higher.
Therefore, a better measure of cost-effectiveness is the cost per passenger-mile. That's what we've presented in Table 3, below, also calculated from the original FTA data in Table 1.

Table 3. Operating Cost per Passenger-Mile

Bus

LRT

% Difference

($)

($)

(%)

San Diego

$0.38

$0.17

-55%

St Louis

$0.66

$0.20

-70%

Los Angeles

$0.48

$0.30

-38%

Portland

$0.51

$0.35

-31%

Sacramento

$0.53

$0.38

-28%

Dallas

$0.74

$0.47

-36%

Baltimore

$0.53

$0.48

-9%

Denver

$0.53

$0.61

15%

San Jose

$0.72

$0.79

10%

Buffalo

$0.78

$0.86

10%

It can be seen that, in an even greater number of cases, the cost
per p-m (passenger-mile) is lower for LRT. (it should be noted
that the data for Denver are for the original, very short, CBD
shuttle-type service, before the first extension of the system to the
suburbs to provide longer-distance, commuter-type service.
Buffalo's LRT system may exhibit shorter-than-typical trip lengths
since it also serves as a free shuttle and circulator system on the
city's downtown Main St. Mall. As for San Jose's LRT system,
while its O&M unit costs in this comparison are clearly above the
norm, LRT has definitely proven its worth in providing efficient,
environment-friendly passenger-carrying capability, attracting
significant transit-oriented development adjacent to the line, and
helping to revitalize downtown San Jose.)

Curiously, LRT's lower operating cost characteristics seem to be
exhibited more in real-world experience than in planning studies
and alternative-analysis comparisons with theoretical bus
operations. Do some planners and their consultants make
erroneous assumptions in attributing greater staffing and other
cost items to LRT and underestimating them for bus alternatives?
in any case, the transit systems which have installed LRT, and
directly experience the operational and cost benefits, know they've opted for a winner.

LRT – A Money-Saver

The bottom line: in almost every case, LRT demonstrates that – in
the appropriate traffic corridor – it can save ongoing operating expenses compared with alternative bus operations.